Trade with Commodities: Monsoon hits Indian coast, early crop sowing likely

Tuesday, May 26, 2009

Monsoon hits Indian coast, early crop sowing likely

* Monsoon onset to trigger early sowing of summer crops

* Crops to gain if monsoon progresses as forecast

* Trade expects new govt to allow rice futures, exports (Adds details, trade and analyst comments)

By Ratnajyoti Dutta

NEW DELHI, May 23 (Reuters) - Annual monsoon rains, vital for India's farm-dependent economy, have hit the country's southern coast raising hopes of early sowing of rice, oilseeds and cotton, the weather office said on Saturday. The four-month monsoon season has begun earlier than the usual date of June 1, it said.

Early onset of monsoon, and forecasts of nearly normal rains, will help raise farm output, which may encourage the new government to lift curbs on rice exports, and allow futures trade in rice, which was banned amid fears of scarcity.

"Monsoon has hit Kerala coast," B.P. Yadav, spokesman for India Meteorological Department, told Reuters.

On May 14, the weather office had forecast the annual rain cycle would arrive on the southern coast at least five days ahead of schedule than its usual date.

"The early onset is always a good news," Yadav said.

India's June-September monsoon rains are a major influence on the farm-dependent economy as two-thirds of Indians live in villages. For a factbox on the impact of monsoon rains on crops, markets and the economy, see: [ID:nDEL415901].

"The timely arrival of the monsoon in the Kerala coast has raised hopes of a good beginning for kharif (summer) sowing," said S. Raghuraman, head trade research, Agriwatch, a commodity research firm.

Industry officials said a good harvest could lead to favourable government policies.

"Early rains will reduce water stress and has brightened the prospects of higher grain production," said Vijay Setia, former president of All India Rice Exporters Association.

"The healthy rice stocks also calls for lifting the existing ban on rice trade," Setia said.

SUMMER-SOWN CROPS

India's summer-sown crops accounted for 52 percent of the estimated food crop output of 229.85 million tonnes in the year to June 2009, the farm ministry said this month.

Rice accounts for nearly three-quarters of the harvest from summer-sown crops.

Expectations of early arrival of rains has already triggered a fall in India's corn futures NMZM9 as well as soybean and rapeseed futures at the National Commodity and Derivatives Exchange.

Monsoon rains are crucial for India's farm dependent economy and determines the fate of summer sown crops like rice, soybean, sugarcane and cotton. For a factbox on the impact of monsoon rains on crops, markets and the economy, see: [ID:nDEL415901] .

In April, the India Meteorological Department said this year's monsoon rains were likely to be 96 percent of the long-term average.

For a graphic of forecasts rains in recent years: here

Though the early onset of monsoon is good for the economy, the distribution of rains in the subsequent four months is important for farm output.

India's weather office is upgrading its technology to give more localised and specific forecasts, which experts say can raise farm output by 10 percent. See [ID:nDEL424409] (Reporting by Ratnajyoti Dutta; Editing by Sanjeev Miglani)